What Is MED EE on My Paycheck? Fed MED/EE Medicare Tax Explained
MED EE is Medicare tax withheld from the employee. How it differs from the employer line, what it funds and why the deduction does not stop when other taxes do.
MED EE, often printed as Fed MED/EE, is the Medicare tax taken from your wages. EE marks it as the employee share, which is the key to reading it: any matching ER line beside it belongs to your employer and never touches your deposit.
What It Funds and What It Costs
Medicare tax funds the federal health insurance programme for people aged 65 and over and for certain younger people with disabilities. The employee rate is 1.45% of Medicare taxable wages, matched by the employer, for a combined 2.9%. Self-employed people pay both halves themselves through self-employment tax.
Why Medicare Wages Often Exceed Federal Taxable Wages
This is the detail that confuses people reading a stub closely. A traditional 401(k) contribution reduces wages subject to federal income tax but does not reduce wages subject to Social Security and Medicare. Health premiums under a Section 125 plan reduce all of them. The result is that your Medicare wage figure is frequently higher than your federal taxable wage figure, and that is correct rather than an error.
The same pattern shows up at year end as the difference between Box 1 and Box 5 on your W-2.
It Does Not Stop
Employees who watch their stubs sometimes notice Social Security withholding ending late in the year and expect Medicare to follow. It does not. Medicare has no wage base, so the 1.45% applies to every covered dollar, and an additional 0.9% begins once wages pass the statutory threshold.
I compare the employee and employer lines and explain the additional tax in my explainer on MED EE withholding for Online Paystub.
Checking It at Year End
Your cumulative MED EE becomes Box 6 of the W-2 and the wages it was calculated on become Box 5. Divide Box 6 by Box 5: the answer should be 0.0145, or slightly more if the additional tax applied. It is a two-second check that catches a real class of payroll error.